I was reading USA Today recently and they had very disturbing story in the paper. No I am NOT referring to:
- The War in Iraq
- A corrupt politician
- An athlete that was arrested… for something
- A CEO who played games with financial numbers
I am sure all of those things were in the newspaper but I was referring to the article entitled “Generation Gap”. This was actually on the front page so hopefully lots of people read the article.
A few paragraphs into the article I read that:
“Nearly all additional wealth created in the USA since 1989 has gone to people 55 and older, according to Federal Reserve data. Wealth has doubled since 1989 in households headed by older Americans”.
To me that is very interesting. To me that is great for one segment of the population: 55 and older. To that segment I say congratulations. The problem is that I am not 55! Even though some have said I look older than that I am not even close!
In the article it stated “that income peaks at 57 and wealth tops out at 63” so clearly I have time to accumulate net worth. But the question I always ask myself and comment to others is you only have so much time. Whatever I did or didn’t save in my 20’s and 30’s is gone – in the past. I can never get that time back and frankly I would like to because I would do a number of things different. The new worth of the different age groups is getting much bigger and creating the “Generation Gap” that the article is titled.
In our backyard we have a small creek that floods after a big rain. After that a surge usually pushes 100 golf balls onto our property. Maybe it’s time I send the boys outside to sell the golf balls 3 for a dollar!
We have someone near and dear to our family named KBW (I will use only initials). She is a very sweet young girl who is starting her career. A twenty something girl who makes a lot more than I did at her age. We have a number of discussions about saving money and sending a certain amount into a mutual fund every month. Even though I consider myself pretty persuasive at times, I have come up short in this instance. We started a fund for her and made the initial $200.00 deposit and asked her to match it (sort of) with $50.00 of her own. Which she did but hasn’t really added much since. I wish I had the chance that KBW has now all over again – because saving more money now pays HUGE dividends in the future. Saving $50.00 extra a week or a month can literally add up to tens of thousands of dollars down the road.
The article had a very interesting chart:
Worth By Age
For Head of
|20 – 24
|25 – 29
|30 – 34
|35 – 39
|40 – 44
|45 – 49
|50 – 54
|55 – 59
|60 – 64
|65 – 69
|70 – 74
|75 and older
These numbers are based on inflation-adjusted 2004 dollars
Source: USA Today analysis of Federal Reserve Board Figures
The article mentions that most wealth accumulation happens rapidly and late in life – after the kids leave, when income is high, debts drop, 401(k) accounts fatten and home equity swells, according to Fed data. So for me there is still time…maybe…Since I had kids later than most and might be in a wheel chair or nursing home when they are in college I might have made a bigger mistake than I originally thought.
The article ends with this quote: “I have friends with every new gadget out there. They have a big house, two cars, college loans. I have no idea how they’re making it on their incomes.” The article also talks about how younger people might not look poor. They are so much deeper in debt than I was at their age – student loans, credit cards, mortgages, car loans – that their net worth isn’t where it could be at this point of their life.
KBW and others: don’t make the same mistake I made years ago. You have a big opportunity NOW – please make the most of it. You can save the “thank you” when you are 30 something and have lots of extra money for a down payment on a house or something else.
- Does this tune sound familiar to you?
- Have you found a way to get through to this generation?
- Do you have any saving secrets that you are willing to share?
All of us look forward to hearing from you!